Oil prices rose during Monday morning’s Asian trading session as investors and traders began digesting the impact of the attempted mutiny against Russian President Vladimir Putin while worries about a global slowdown remained.
West Texas Intermediate futures maturing in August rose 0.65% during Monday morning Asian trading session to trade at $69.68 per barrel. Brent futures maturing in August rose 0.73% to trade at $74.36 per barrel, according to Benzinga Pro.
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Rystad Energy Senior Vice President Jorge Leon wrote in a note that the internal military struggle in Russia adds limited oil price pressure amid heightened tensions in Moscow, according to a Bloomberg report. "We do, however, believe that the geopolitical risk amid internal instability in Russia has increased," Leon said.
Fears of a recession due to extended rate hikes amid sticky inflation appear to be balancing any upward price pressure due to geopolitical and supply risks. This is given the fact that Federal Reserve Chair Jerome Powell has indicated rates may be hiked by a further 50 basis points this year.
At the same time, higher-than-expected inflation and a subsequent surprise 50 basis points rate hike by the Bank of England seem to have unnerved investors who have begun weighing in on the possibility of extended rate rises in the U.S.
Supply Concerns: RBC Capital Markets analyst Helima Croft said there were worries that Putin would declare martial law that would stop workers from showing up to major loading ports and energy facilities, potentially impacting millions of barrels of exports, according to a Reuters report.
“It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,” she said in a note.
The United States Brent Oil Fund LP BNO closed 0.16% lower on Friday while the Vanguard Energy Index Fund ETF VDE shed 0.88%.
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